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How Much Does It Cost to Start a Sunglasses Business? (Sales Forecast and Breakeven Analysis Included)

It is not cheap to set up a production plant that can produce sunglasses daily. Hence, you should budget over $200,000 if you want to start a sunglasses production business.

When it comes to the amount required to start a sunglasses business, the choice will depend on your overall business goals and objectives. Meaning, there is no fixed amount required to start a sunglasses business.

Sunglasses come in different designs (shapes, colors, and sizes) – many thanks to companies that are into the production of sunglasses.

Interestingly, any interested investor can still open a sunglasses production company and still have his or her products distributed across the country and abroad.

Estimated Cost Breakdown for Opening a Sunglasses Production Business

  1. Injection molding machines, lens cutting/polishing machines, assembly equipment – $70,000
  2. Raw Materials (High-quality plastic, metal, glass for frame and lens production) – $30,000
  3. Building Lease and Renovation – $25,000
  4. Initial Inventory – $15,000
  5. Labor Costs (Salaries and wages for production staff, designers, and administrative employees) – $25,000
  6. Marketing and Branding – $15,000
  7. Licensing and Legal Fees – $5,000
  8. Utilities and Insurance coverage for machinery and employees – $7,000
  9. Contingency Fund – $8,000

Total – $200,000

Sales Forecast and Breakeven Analysis

For a sunglasses production business starting with a capital of $200,000 and the average selling price per pair of sunglasses is $50 (this price might vary based on brand positioning, material quality, and target market).

If the number of units sold per year starts modestly and grows at 20% per year as the brand gains recognition, with a fixed cost of $80,000 annually and variable cost of $20 per pair (includes materials, packaging, shipping per unit).

Year 1:

  • Units Sold: 2,000 pairs
  • Revenue: 2,000 pairs × $50 = $100,000
  • Variable Costs: 2,000 pairs × $20 = $40,000
  • Total Costs: $80,000 (fixed) + $40,000 (variable) = $120,000
  • Loss: $100,000 – $120,000 = -$20,000

Year 2:

  • Growth in sales: 20% increase → 2,400 pairs
  • Revenue: 2,400 pairs × $50 = $120,000
  • Variable Costs: 2,400 pairs × $20 = $48,000
  • Total Costs: $80,000 (fixed) + $48,000 (variable) = $128,000
  • Loss: $120,000 – $128,000 = -$8,000

Year 3:

  • Further 20% increase in sales: 2,880 pairs
  • Revenue: 2,880 pairs × $50 = $144,000
  • Variable Costs: 2,880 pairs × $20 = $57,600
  • Total Costs: $80,000 (fixed) + $57,600 (variable) = $137,600
  • Profit: $144,000 – $137,600 = $6,400

Break-Even Point

  • Total Fixed Costs: $80,000 per year
  • Price per Unit: $50
  • Variable Cost per Unit: $20

Contribution per Unit: Price per Unit − Variable Cost per Unit

  • $50 − $20 = $30

Break-Even Units = Fixed Costs ÷ Contribution per Unit

  • $80,000 ÷ $30 = 2,667 units per year

Based on the figure above, your sunglasses business needs to sell approximately 2,667 pairs of sunglasses per year at the set price and cost structure to breakeven.

The above analysis indicates that in the third year, your sunglasses business begins to see profitability as sales volumes increase.

Adjustments to pricing, production costs, or operational efficiency can affect these calculations and would need re-evaluation if any assumptions change.

Factors That Influence the Cost of Opening a Sunglasses Business

  1. Facility and Location

The size of the facility you want to start your sunglasses production business will determine how much you will spend on rent or lease, and also on utilities.

Apart from that, the location of the production facility you want to rent or lease for your sunglasses production business will also go a long way to determine how much you will spend not just on rent and lease, but also on logistics.

For example, if you are into exporting your sunglasses, and your production facility is far from shipping ports et al, you will have to spend more on logistics.

  1. The Production Scale of the Business

The truth is that, for every type of production business there are three scales you can choose to start the business. You may want to start a small-scale sunglasses business, a medium-scale business, or a large-scale sunglasses production company that can export sunglasses to different countries of the world.

Of course, you know that the bigger the production scale of the business, the more you are expected to spend in starting the business.

  1. The Needed Raw Materials

For example, to produce sunglasses, you will need to budget for Acetate, Metal Frames, Plastic Frames, Lenses (Glass or Polycarbonate), Nose Pads, Hinges, Screws, Temple Tips, Lens Coatings, and Decorative Elements (e.g., rhinestones, logos).

Apart from the cost involved in purchasing these raw materials, sourcing them is yet another hurdle. It might involve importing them from other countries, and that will cost you a lot of money.

  1. The Needed Equipment

You cannot start a sunglasses business without purchasing and installing the needed equipment in your production factory. Apart from the fact that you must rent a facility that is suitable for the kind of production business you want to start, you must also make sure you install the needed machines and equipment in the facility.

For example, if you are looking to start a sunglasses production business, you should make provision for lens cutting and shaping machines, frame molding and cutting machines,

Polishing and finishing equipment, UV coating machines, assembly stations, quality control tools, packaging machinery, and possibly design software for prototyping and customization.

Of course, you know that it will cost you a large portion of your startup capital to purchase and install all these machines and equipment.

  1. Labor Costs

Trust me, the cost of recruiting, training, and maintaining your workforce is going to be a significant portion of your budget. It doesn’t come cheap to hire skilled workers for the production, design, and customization of sunglasses.

  1. Packaging and Shipping Costs

If you are into the production of sunglasses, you must get your products across to wholesalers, and distributors in your country and perhaps across different countries, so you must have a budget that will cover that aspect of your business.

In essence, you must make provisions for packaging materials, shipping supplies, and logistics, and these costs will to a large extent influence your startup expenses.

Note that your budget for packaging and shipping will depend on the scale of your production and the locations where you want to distribute your sunglasses.

  1. Marketing and Advertising Cost

Apart from costs associated with packaging and shipping your products, you are also required to have a budget for marketing and advertising your sunglasses. The truth is that there are different levels of competition out there.

There are sunglasses brands that are determining the direction of the market in different jurisdictions hence for you to break into the market, you must make sure you have a budget that will cover your marketing and advertising costs.

For a new sunglasses business, you would have to be aggressive with your marketing and advertising strategies if indeed you want to win a fair share of the available market in your location.

For starters, you may have to create a budget that can cover your website development, road shows, and advertising campaigns.

  1. Regulatory Compliance

This cost can significantly influence how much it will cost you to start your sunglasses production business. When we talk of complying with the required regulation, we are talking about obtaining all the needed licenses and permits in the city where you want to start your sunglasses business.

For example, if you intend to start your sunglasses production business in the United States, you will need to obtain a business license, sales tax permit, employer identification number (EIN), health permit,

Environmental permit (if using certain materials or processes), zoning permit, sign permit (if displaying signs outside the business), and home occupation permit (if operating from a residential location).